DAILY REVIEW 16 September 2014

EU Analysis:

EU: The daily candle is a below average spread (64pips) bear closing 1/2 off the low on low vol<9days. The candle close and volume suggests a lack of selling pressure. Levels of interest: Demand: Daily/Weekly: 1.2777, 1.2754, 1.2661 Supply: short-term: 1.3025, 1.3050 Weekly/Daily: 1.4184, 1.4246 pivot. Background: Nothing has changed. A look at

the open orders both net and non-cumulative above shows a largely unchanged order stack. Buy orders around 1.2850 – 1.2900 with hardly any demand below 1.2750 There is no significant supply level anywhere near the 1.3000 – 1.3050 level. Read yesterday's review for the levels, they are the same. SM is likely to induce breakout traders long at the 1.2988 pivot or even higher to around the 1.3049 before reversing to continue the downward trend. Note the confluence 1.2988 (38.2%Fib) 1.3000 (50%Fib) and 1.3049 (61.8%Fib). The Order book chart shown above can be accessed at the Oanda website.

EU long levels: 1.2777, 1.2754, 1.2661  
EU short levels: 1.2988, 1.3025, 1.3050 

GU Analysis 

GU: The daily candle is a small spread (57pips) bear closing at the low on low vol<7days. The candle close and volume suggests a lack of selling pressure. Demand: Weekly/Daily:  1.5870, 1.5850 Short term: 1.6058 Supply: Short term: 1.6158, 1.6185, 1.6230 (Gap), 1.6320 (Gap close) 
Background: Keep in mind the history making Scottish referendum this Thursday. The 156pips gap caused by this initial weekend news has not closed yet and still has the possibility of being closed. Essentially the order stacks do not look significantly changed as there are hardly any significant orders above 1.6200 and we see a build up of orders below 1.6277 as retails traders chase the market possibly playing straight into the hands of the SM. SM is likely to create selling pressure to continue to fade weak longs while exciting more shorts to around the 1.6120 level before reversing back to test yesterday's high (1.6277) or the gap close at 1.6320 The cable will likely whipsaw from time to time as we approach the time of reckoning and news filters through on the various polls conducted to guess the likely outcome of the referendum.

GU long levels: 1.6050, 1.5870 
GU short levels: 1.6277, 1.6320 (Gap close), 1.6340 

Posted at 04.43 am Updated 05.15 am  (posted EU instead of GU charts, reposted)